Agencies include any fiduciary relationship that results when a principal consents to an agent acting on the principal's behalf subject to the principal's control, and the agent agrees to act on behalf of the principal. An agency is a voluntary contractual relationship that normally is terminable at will by either the principal or the agent. Although the principal and the agent must both consent to the relationship, such consent may be inferred from the acts of the parties.

An agent may have actual or apparent authority. Actual authority is authority expressly set out in the agreement setting up the agency relationship or authority that is implied from or incidental to carrying out the ordinary steps that make up the agency activities that are expressly authorized. Such actual authority is viewed with the perspective of a reasonable agent. Apparent authority, viewed from the perspective of a reasonable third person, is authority that arises from acts of the agent that lead a third party to rely on the existence of an agency. Apparent authority can be ratified by a principal who learns of circumstances suggesting an agency but fails to deny the existence of the agency.

An agent's duties to the principal include obedience, loyalty, and care. The agent is obligated to obey the definition of the scope of the agency in the agent's agreement with the principal. The agent also must be loyal to the purposes of the agency and must not engage in self-dealing that is not disclosed and consented to by the principal. Finally, the agent must not be negligent in dealing with third parties because such negligence may be imputed to the principal. In return for an agent's performance of duties, the principal is obligated to provide compensation and other agreed benefits to the agent.

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